views from the shire

Given my journey, you can imagine my first reaction to questions of work-life balance is fairly unsympathetic. I want to protest that, by legitimizing such a false dichotomy, you’re pre-empting a much more meaningful conversation. But I suspect that conversation is closer to the heart of this anxiety than most people realize.

If you’re worrying about work-life balance at the beginning of your career, and you’re reading this, I’m guessing you’re not lazy. You’re not looking for an easy life (even if this seems like an appealing concept right after midterms). I’m willing to bet that what you’re really worried about is someone else owning your most precious possession: your future.

Staring into the abyss of companies that glorify triple-digit hours (never mind the substance of the work), this makes intuitive sense. But having surveyed the landscape of high-tech hiring, I’m convinced you should be just as concerned about jobs that promise high stimulation and total comfort. When you let yourself be sold on easy hours, outrageous perks, and glib assurances about the project you’ll join and the technologies you’ll get to play with, you’ve just agreed to let your future become someone else’s.

I hate the construct of work-life balance for the same reason I love engineering: the reality is dynamic and generative, not zero-sum. It’s about transcending the constraints of simplistic calculations. Creating the life and the work you want are by no means easy challenges, but they are absolutely attainable. What’s not realistic is thinking you can own your future and be comfortable at the same time. Grit, not virtuosity, will be the biggest determinant of your success, for reasons I’ll explore in a bit.

At the same time, grit and discipline aren’t enough. You need purpose. And I can state categorically that the purpose you discover, with all the sacrifice that entails, will be more motivating and meaningful than the one handed to you in the form of some glamorous project that, realistically, will succeed or fail regardless of your involvement.

The catch, of course, is that true purpose doesn’t sit around waiting to be discovered. It requires constant pursuit. Here’s what I’ve learned from a decade and a half of sprinting.

There’s no time like now. As learning animals, we’re subject to various ages of cognitive potency. As a young child, your aptitude for acquiring a language or learning an instrument is at its peak. Accordingly, as a professional, your early 20s are the most formative stage. It is absolutely critical to make the most of this time because the pace of learning grows slower and more incremental as you age, whether we care to admit it or not. Of course, you can always learn new things, but most often the wisdom of experience is largely the result of earlier realizations having the time to compound into something richer.

The place of maximal learning is often at the point of significant pain. It’s not just about having a more pliable mind - grit, and its close cousin, resilience, are essential for taking your intelligence further than it can get on its own. And while intelligence compounds, grit degrades in the vast majority of cases. Regardless, grit isn’t something you can suddenly develop after a life of leisure. For these reasons, owning your future means choosing grit over the allure of a predictable pace.

Of course, you still need to hold a pace. Studies show that marathoners/endurance runners do tons of self-talk to push past the pain. “It’s a marathon, not a sprint” is a well-worn cliché, but it’s striking how often it’s invoked to rationalize comfort as opposed to promoting sustained excellence. Don’t think for a second that elite marathoners have trained to the point that a sub-six-minute mile pace is comfortable. It’s incredibly painful. What separates the truly elite is having found a purpose that makes the sacrifice acceptable.

At the same time, complete self-motivation is incredibly rare. It’s probably not a realistic goal, and that’s fine. Find the people who will sharpen your resolve as well as your ideas. Again, your first step matters. If you choose a job for work-life balance, chances are, so did everyone who came before. Talent is one thing when evaluating your future teammates, but ask yourself this: when you need models and inspiration to be more than you are, will you be able to find them? Where will your gamma radiation come from?

You can find your zen in stressful, chaotic times. In fact, I’d argue this is the norm, even the ideal, for 20-somethings. Some adrenaline is good for your performance. Not having time to waste requires you to focus on the essentials and develop an innate sense of direction. That way, when you do eventually get to let your mind wander, it will be in rewarding directions. These days, I build in calendar blocks for “brain space”. That wouldn’t have made sense 10 or even 5 years ago – not because I have more free time now, but because, early in your career, you learn much more by doing than reflecting. And this can be the difference between creating your future and receiving it in a fancy envelope.

At the limit, you probably should care about work-life balance – it’s not going to remain a static thing your whole life. But at the margin, as a new grad, you should focus on the most important problem. Find the thing that motivates you, work your ass off, learn as much as you can, and trust that today’s gains will compound well into the future – your future.

Working your ass off isn’t bleak – it’s quite the opposite. Provided there’s a purpose, sprinting at an unsustainable pace is an act of tremendous optimism. A mindset of premature retirement might sound rosy, but in truth it’s deeply cynical and extraordinarily insidious – much more so than being overpaid or overpraised, and much harder to correct.

But back to the concept of caring about work-life balance at the limit, how do you know where the limit is? Isn’t life fundamentally uncertain? Here’s what I’ve come to realize: you can’t pre-emptively retire without doing the work that makes you appreciate the chance to rest. Maybe you can, but assuming you have something to contribute, it’s going to be an empty reward. Sacrificing your potential to comfort isn’t a hedge against an early death – it IS an early death. As Emerson wrote in Self-Reliance, "Life only avails, not the having lived. Power ceases in the instant of repose; it resides in the moment of transition from a past to a new state, in the shooting of the gulf, in the darting to an aim.”

We’ve been told over and over to choose life over work in order to achieve balance. I’m urging you, especially at the dawn of your career, to instead choose life over balance, and make the work so meaningful that you wouldn’t want it to exist as a distinct concept. This is how you ensure that your future remains yours.

If I've learned one thing from observing great individuals (and great companies), it's that greatness is inherently asymmetric. If that sounds dangerous, it is. Any scholar of counterterrorism or cyber war will tell you that asymmetric threats require asymmetric countermeasures, but more fundamentally, they require asymmetric people. When forming a team, I don't want to assemble a polite roster of cross-functional professionals. I want the X-Men: a medley of mutants united for good.

The Incredible Hulk, in particular, embodies the growth model I've come to believe is necessary for achieving greatness. For those of you who were popular in junior high school, the Hulk began as the mild-mannered, though brilliant physicist Bruce Banner, and was transformed into the Hulk after exposure to gamma radiations from a nuclear explosion. From then on, Bruce Banner would morph into the Hulk during times of extreme stress or exigency. While the Hulk’s ability to retain Banner’s intelligence evolved over the series, it’s safe to say he was was never the same again.

So what does growth for greatness look like? It begins with accepting unevenness, and reaches its potential through a conscious nurturing of extremes. But introspection and diligence are not enough. Real growth is scary, hard, periodic, and responsive to your environment. Thegamma ray might seem like an extreme metaphor for catalyzing growth, but if you want to truly achieve greatness, it’s much closer to the reality than the safe, comfortable models we're taught to accept. You need periodic radiation, not lifting a little more weight every day. In the short term, linear development predictably leads to linear results, and in the long term, factoring in drag and the insidious effects of growing comfortable, the result is decline, as Stephen Cohen eloquently described in his conversation with Peter Thiel and Max Levchin. Intelligence is compounding all the time, and correspondingly, so are complacency and missed opportunity.

In practice, it's usually not so straightforward to go looking for gamma rays out of the gate, but there are some obvious pitfalls you can avoid along the way. One of the most important: don’t fall prey to the illusion of growth promoted by the corporate ladder. It’s a crutch as much as a way up (and tech roles/companies are NOT immune - if you see Software Engineer I, Software Engineer II, etc, that’s a ladder). The ladder can be partially explained by convenience, or convention, but ultimately it’s there to assuage your fears – not only of not reaching your potential, but of incubating a potential that doesn’t fit the bounds. While on the ladder, you can only fall so low or climb so high. It's a false frame, not only because hierarchy is such a poor proxy for impact, but especially for lulling you into thinking achievement falls within a standard distribution.

It would be disingenuous not to acknowledge that becoming a mutant is not all upside. Make no mistake, gamma radiation can hurt you. There is always the risk of failure, and win or lose, there will be scar tissue. In that sense the ladder is also a safety net. As an aspiring mutant, you shouldn’t let false bravado obscure this realization – just recognize that in choosing the ladder you’re explicitly shorting your potential and putting protecting your ego ahead of your outcome. As an aspiring Professor X, accept that there will be failures, and that you’ll need to make highly imperfect tradeoffs on false positives vs. false negatives when hiring and developing talent.

Mentorship is likewise critical when directing mutant powers towards the greatest possible good. The X-Men would not have become X-Men without Professor X’s School for Gifted Youngsters. But again, the standard model doesn't apply. To begin with, you need mutants to mentor mutants, and in many cases, to provide the initial dose of radiation. Otherwise, even the best institution of higher learning will predictably devolve into a lemming academy.

Once mutation is in process, one of the greatest aspects of mentorship is, paradoxically, autonomy. This is especially important because extreme growth doesn't happen on schedule, but is subject to periods of intense activity. As a mentor of mutants, you need to be attuned to these periods, and when they come, confer even more autonomy. Above all, fight your instinct to handhold (hard to do when both hands are always clenched in a fist anyway!).

The final part of the equation is to seek out the greatest challenges you can, both in terms of meaning and difficulty. And this is perhaps the greatest beauty of the gamma radiation metaphor. It's not just about unimaginable intensity. It's about an external reality leaving an indelible imprint on your internal reality. There are some gifts that are only fully formed through creative destruction, and it’s these gifts, in turn, that allow you to create new external realities - in other words, to change the world.

This post is about the current insanity in
Silicon Valley, but I don't mean the valuations - at least not the ones
everyone is talking about. Instead, I want to talk about how you value
something much more important than common stock: yourself.

Over the course of thousands of overwhelmingly
positive interactions with top CS students over the past few years, what's
scared me the most is the tendency to think of your future job primarily as a
vehicle for certain types of projects. This is, in fact, one of the worst
possible reasons to take any job.

In many ways this line of thinking isn't so
surprising. Perhaps because the long-theorized tech crash hasn't happened, and
most companies (even relatively innovative ones) think of hiring as filling
slots, our economy continues to promote skills over aptitude and ability. And
even the best schools are much more effective at teaching subjects than
synthesis. As a result, even in an age when software engineers are starting to
be properly valued, there is a real risk of being commoditized - ironically, by
yourself.

Apart from an earnest desire to cultivate
"valuable" skills, however, is something I'll call techno-hedonism.
Besides just thinking of your job in terms of projects, this means evaluating
projects by how pleasurable they are to you versus how much good you're
creating in the world. As a result, topics that could be invaluable as part of
a greater whole - especially things like machine learning - become playthings.
And this is how young people who honestly thought they were going to change the
world end up being paid too much to quit to serve ads more effectively. In the degenerate case your employer becomes
something to be agnostic about, merely a vehicle to work on a specific project
of hedonistic desire.

Rather than deciding based principally on the
project, I would suggest there are two questions that should inform everything
else: Do you believe in the institution? And do you believe in yourself?

Evaluating the institution involves many more
questions, but I'd argue these few are most important: Is there a real
opportunity to make a positive impact? If so, is the team equal to the challenge,
or (more likely) on the path to getting there? Is there a possibility of
surviving as a standalone entity - this is almost impossible to know ex ante,
but if the stated goal is to get acquired that should tell you something. Do
they have a real mission and culture, or just hedonism and homogeneity? Do they
invest in an individual's growth, or just increased productivity?

By believing in yourself I don't mean projecting
an arbitrary level of confidence - it requires a willingness to critically assess your strengths and
weaknesses and reconcile them with an emerging and constantly evolving
sense of purpose. This cannot happen overnight. If you're betting on your
ability to do something important, you'll learn - piece
by piece - to intuitively subordinate the process to the goal, and
separate the act of discovery from the procedural. By contrast, if you're
betting on your ability to stay fulfilled by repeatedly doing a series of
tasks, however pleasurable, you're actually shorting yourself.

It's not so difficult to see the surface
characteristics of an institution for what they are - when you become enamored
of a slick office space, at least you know you're being shallow. Becoming
enamored of projects, on the other hand, feels like investing in your
most important assets when in fact you may be stunting them.

I want to emphasize that this is not happy talk.
It is unbelievably hard work. Having it all figured out now is the unrealistic
part - and if you actually do succeed in your design, that's when the reality
often proves to be bleakest.

Engineering is fundamentally generative. Specific
implementations may be highly deterministic, but the defining character of the
work is possibility. It's understandable to want to cling to certainties,
especially after hearing what a dark and chaotic world it is for most of your
conscious life. I say: embrace conscious ambiguity. The alternative
is a predetermined future - one that truly belongs to the robots. You are not a lottery ticket - but
neither are you an algorithm.

Tags

“Do important things” is often invoked as a rallying cry in
these pages, but this time I want to talk about something more important than innovation, invention, entrepreneurship, and all the rest. I want to talk about
dharma. More specifically, I want to talk about your dharma.

Classically speaking, dharma represents both cosmic law and
order – our universal duty - as well as reality itself. Upholding your dharma, then,
refers to both your ultimate responsibility, and upholding the truth. It is no accident that I say your dharma. The truth, while in one
sense absolute, is also deeply personal, and rooted in the enduring power of
the individual.

With commitment to the truth as the first principle, your
code of conduct is simple: When you see something that's broken or bad, you have to say something about it or fix it yourself. Just as
importantly, when you hear something, listen. It’s not just about the success
of the organization, but also a moral imperative not to let anyone you care
about fly off a cliff.

In practice, this is extremely painful. Honest,
unadulterated feedback is as emotionally alien as it is intellectually obvious,
whether giving or receiving. Confronting the truth together is a social
endeavor, yet it flies in the face of all social convention and pleasantries. Unlike
you or me, the truth doesn’t have feelings – but that is precisely why it’s the truth.

Of course, it’s easier to face hard truths when we talk
about collective failures. These are important to address, and can be
invaluable object lessons for the organization writ large. Individual failures,
however, are the ones you, and only you, can control. Accordingly, the most
painful and most vital incarnation of the truth is individual feedback – all in
the service of discovering and fulfilling your dharma.

This matters on multiple levels. In practical terms, nothing
happens unless you make it happen. Day to day, the bias towards action is one
of the most valuable things you can institute.
Without your concerted action, things like planning, analysis, strategy,
et cetera are just distractions from an empty center.

However, dharma is also about the unlocking the essence of the
individual. Facing your dharma means stripping away the pretense, delusion, and
distractions to reveal who you are
and what you are meant to be doing. You
uphold your dharma in the service of both the individual and the collective. For
the whole to be greater than the sum of its parts, the parts cannot seek
anonymity and cover in the whole.

Likewise,true
feedback comes from a foundation of investment in the individual. The
underlying intentions need to include the opportunity to grow from mistakes and
the willingness to help someone get there. We all like to talk about investing
in people, but it’s important to internalize that hiring isn’t the end of the
road. The hard part starts after - especially for the most innately talented
individuals. If you don’t give them feedback, you’re just as guilty of coasting on
their talent as they are, and you will inevitably reap the
consequences.

As many a wise master has observed, there are countless paths to dharma – indeed, there are as many forms of dharma as there are seekers. Everyone
arrives at the truth in a different way, as evidenced by leaders as diverse as
Ray Dalio, Prof. Carole Robin, and Peter Thiel.

Ray Dalio’s Principles is more than required reading at Bridgewater, and
Bridgewater’s culture of “radical transparency” is almost infamous for the
degree to which honest feedback is emphasized. Dalio’s most basic principles states:

“Truth - more precisely, an accurate understanding of reality- is the
essential foundation for producing good outcomes.”

It seems simple enough, but
the real genius of Principles is how
he mediates between the truth as an absolute and the individual experience:

“Above all else, I want you to think for yourself - to decide 1) what you want,
2) what is true and 3) what to do about it.”

Dalio also caveats that “you
can probably get what you want out of life if you can suspend your ego”, and
the same can be said of feedback. For most of us, this will be the hardest battle.

One of Peter Thiel’s great maxims is
“Listen carefully to smart people with whom you disagree.” Thiel is a renowned
contrarian, but he didn’t hone his worldview in a vacuum. One of his greatest
strengths has been assembling teams with the built-in structural tension needed
to confront bias and complacency head-on and do transformative things. To be
frank, this includes the ability pre-select for thick skin. No one who was at PayPal in the early days
would describe it as a touchy-feely place – but factoring in
the type of talent it attracted, that was part of the genius of the design. Pre-eBay PayPal practiced a form of directness that probably wouldn’t have flown at most
other companies – but look at the record of the PayPal mafia versus any other
group of corporate alumni.

Professor Carole Robin of Stanford’s Graduate School of
Business is best known for her popular “Interpersonal Dynamics” course,
affectionately nicknamed “Touchy Feely”. As Professor Robin describes,
“"It's about learning how to create productive professional
relationships," and feedback is a key ingredient. Robin’s approach
may seem like a high-empathy yin to the low-empathy yang of radical
transparency or the PayPal model, but many of the basics are the same. Robin
advises doing it early, and above all practicing often. She also emphasizes the
need to avoid shaming and to “stay on your side of the net” by not making the critique
personal – in other words, don’t aim for the ego. Finally, listening is crucial – in
Touchy-Feely speak, “It takes two to know one".

Recognizing there are many paths to dharma, where do you
start? The most important thing is to take that first step, practicing feedback
early and often, and making it a non-negotiable component of every consequential
effort. To have any chance of sticking, it has to become the new normal.

One of the great tragedies of working life is the tendency
to treat feedback like taxes: a necessary evil to be addressed annually or
quarterly. Too often, feedback is also synonymous with either punitive or
back-patting exercises. You need to inoculate people against these
associations by starting early, before there’s a crisis. Of course, as new
people arrive, you will be forced to begin the acclimation process from
scratch, because organizations that practice truthful feedback as a way of life
are rare, and individuals for whom it comes naturally are rarer still.

Another complication is that people tend to be lopsided in
their feedback. Those with lower empathy have the easiest time giving feedback.
It’s intuitive, even reflexive, but these people tend to be terrible at giving
feedback in a diplomatic way. This is your opportunity to suspend the
ego, assume it’s not a personal attack, and consider the substance of what is
being said. Eventually, you realize that seemingly low-empathy individuals are
often just carrying out their dharma. Make no mistake, it is a gift.

On the other hand those with high empathy are best suited to
diplomatically give feedback, but struggle to make it appropriately critical
because the very thought of doing so causes pain. An empathetic style can
also be a gift, but only when personal sensitivity is complemented by the
courage to overcome the inertial bias against criticism. Above all, recall that
this is the real world. There is no perfect Goldilocks balance. The key
is to get started with the ingredients you already have.

You should also consider the source – except when you
shouldn’t. Remember Peter Thiel’s smart people who disagree with you. With any luck,
you will have colleagues who possess deep credibility in areas you don’t, and
you should make extra effort to listen to them. On the other hand, sometimes
incisive and true feedback will come from people with no apparent legitimacy. When
your ego cries out “who the hell are you?”, turn the other way and focus on the
substance of the criticism.

What if you’re wrong? This is always a possibility, giving
or receiving, but because you are already thinking critically, it’s not a
meaningful risk. If there is any possibility in your mind that something is
wrong, confront it together. Either you avert disaster, or you discover why it
was in fact right. Both are preferred outcomes.

Feedback is especially hard at any meaningful scale. The
larger you get, the tougher it is to guarantee a high standard of intellectual
honesty, while cracks in the foundation become increasingly subtle and
imperceptible. In many ways, it’s good to maintain a healthy reserve of fear of
what you might become - look no further than our political system to see what
happens when the truth is focus-grouped beyond all recognition.

As with almost any worthy endeavor, the pursuit of your dharma
involves constantly raising the bar. It is never easy to ask people to be more
than they have been, and to address when something has stopped working, or
never did. It is doubly hard because these realizations often come when people
are working their absolute hardest. As painful as it is to admit that someone’s
best isn’t good enough, it doesn’t make it any less true. In fact, it becomes
that much more important.

It’s fine to say failure is not an option in moments of
bravado, but you know inside that abolishing failure – at least the lower-case
kind – is not only unrealistic, but leads to denial and paralysis. It’s
entirely reasonable, on the other hand, to insist that you won’t accept failure
without feedback. Only by confronting the day-to-day truth can you hope to unlock
the greater truth of your highest potential, as an organization and as
individuals. That is good karma.

One of the more pernicious, and also subtler, difficulties
of governance is something I’ll call the tyranny of optics. Across the
organizational spectrum, you find systems that are designed to appear transparent, fair, and free of conflicts
of interest. Yet all too often, the result is gridlock and bad outcomes for the
honest actors, while actual corruption is only pushed deeper underground. It’s
the ultimate bitter irony: instead of functional compromise, you get
institutionalized disaster.

The legacy government acquisitions system is a perfect
example. The driving force is typically not a desired outcome, but rather a
long list of requirements established to pass the eye test. The unintended
consequences of these requirements, combined with their tendency to stifle
innovation, result in the worst of all possible worlds - for the mission, the
taxpayer, and the many people doing their best to both produce and acquire high-quality
technology.

One of the greatest pitfalls is contracting on a cost-plus
basis. This is largely a function of optics, as well as the inherent difficulty
of placing value on high-tech innovation (and the age-old confusion of cost
with value). The problem is that a fixed profit margin means you can only make money by increasing revenue –
there’s no incentive to increase efficiency, even though efficiency is the
whole basis of Moore’s Law. In essence, you substitute accounting for
accountability, and the effect is that the true value of technology, and the true
potential for innovation, are obscured by the very mechanism meant to ensure
transparency. It’s also worth emphasizing that for the vendor, it’s about simple
math, not corruption. When you can only make money on the top line, a rational
actor has no choice but to conform or find a different business.

Furthermore, the system is designed to evaluate the surface qualifications
of a vendor to perform work at the government’s risk – have they done something
like this before for similar clientele? When building massive hardware
investments such as aircraft, this might seem like a reasonable question
(though the success of SpaceX has chipped away significantly at the conventional
wisdom). When applied to information technology, it’s much more obvious what an
arbitrary standard this is - imagine if Larry Page and Sergey Brin had been
subjected to these considerations when they were raising capital. The consequence
is that the number of “qualified” contenders remains flat over time. This, in
turn, creates in an anti-competitive vicious cycle where the presumed ability to deliver is based on
perceived qualifications, rather than those qualifications being based on the actual ability to deliver.

Of course, technology projects fail all the time – but
because optics are paramount, there’s no willingness for the customer or vendor
to admit failure. Instead, we keep sinking money into the same projects until any resolution seems palatable, or the
original need is forgotten. Paradoxically, the system demands perfection, yet actual
failure is shockingly acceptable – so long as the vendors are “qualified”. Because
these failures are overseen by familiar faces, the vetting committee still
boasts a perfect record. It’s like a dystopian version of Blackstone’s
formulation: better ten credentialed companies should fail than one
startup. Consequently, no one is willing to take the kind of development risks
that could yield transformative discoveries. Failures that amount to sunk costs
are acceptable, while the ones that could really teach us something are unthinkable.

A highly respected veteran of Congress and the Executive
Branch once told me that one of the more underreported challenges of DC was
that killing earmarks only removed much-needed grease from the system,
predictably causing the machinery to grind to a halt. Ironically, earmarks connoted
a certain honesty because everyone knew what was going on -The practice allowed
for plenty of valuable give-and-take - the real problem was that in many cases
the optics were just too shaky.

Since the earmark moratorium, we’ve been treated to an
endless game of budgetary chicken that has certainly led to worse outcomes for
taxpayers than earmarks ever did. Meanwhile, conflicts of interest haven’t gone
anywhere – they’ve just reappeared in the form of more insidious slush funds
and legislative blackmail techniques. Technology acquisitions and Congressional
deal-making might appear to be very different beasts, but in both cases, the
substance of compromise and pragmatism has been replaced by the rigid ideology of
covering your backside at all costs. When optics are the primary concern, you
can’t even have token cooperation, let alone the partnership needed to solve
hard problems.

Bill and Melinda Gates’ recent Wall Street Journal editorial, Three
Myths on the World’s Poor, exposes the tragic result of focusing on optics
above everything else. Only a small percentage of foreign aid is lost to
corruption, but that part always receives vastly disproportionate attention. If
the absence of any perceived impropriety became the design criteria for providing
aid or philanthropy, we’d only hurt the very people who need the most help. As
the authors poignantly ask, “Suppose small-scale corruption amounts to a 2% tax
on the cost of saving a life. We should try to cut that. But if we can't,
should we stop trying to save those lives?”

The tax metaphor also helps to expose the rampant cynicism
that preys on optical controversies. Almost no one would consider a small tax, or
other nominal costs of doing business, a good reason to abandon an
overwhelmingly profitable enterprise. Why should the criteria be impossibly
strict when we stand to gain lives as opposed to dollars? Perhaps better than
anything else, the humanitarian aid challenge reveals the logical conclusion of
elevating optics above everything else: since a perfect solution is impossible,
we’re better off doing nothing.

Every election cycle, someone promises to run the government
like a business. Setting aside whether this is desirable or feasible, the
obvious challenge is that the optics become most restrictive when the
government bears the risk (as businesses generally do). Yet vast opportunities
exist for government to transfer risk from taxpayers to suppliers. Imagine a
marketplace where vendors can only compete if they guarantee an outcome or your
money back. Optics would revert to their proper place: still a factor, but far
from being the first or only consideration.

By ending the charade of demanding perfection, we can stop
wasting time on the fantasy of eliminating risk and instead focus on the real
work of managing it. When you practice the art of the possible, paint will
inevitably splatter – but to a realist, the result is infinitely more
attractive than an ideal that will never be achieved.

Without commenting at all on the policy wisdom of the
Affordable Care Act, it’s clear that the rollout of Healthcare.gov has been
disastrous. This has been chronicled more diligently elsewhere, but can be
summed up by noting that, while Healthcare.gov was plagued with bugs, crashes,
and general confusion, a team of three college students replicated much of
the desired functionality of the site in a few days. Of course, the alternative site, HealthSherpa, does not handle the user
or data scale of healthcare.com or perform the most complex operations of
applying for coverage, but the contrast between a site built for free and the ~$600+
million obligated for healthcare.gov is sobering.

We can draw a few lessons from this affair. The first is that it represents a deep structural
problem of government IT projects. The process used to bid out and build
healthcare.gov was not, contrary to what you might have heard, especially
unique or nefarious. On the contrary, it
represents the norm for large federal IT projects: mandating what should be
straightforward products to be built from scratch in many ponderous phases,
replete with massive sets of requirements and a commensurately high number of
billable hours.

The major difference is that this time, the users are the
American people. The frustration of grappling with subpar technology is the
same experienced daily by some of the most vital people in our public service
ranks. Soldiers, intelligence analysts,
law enforcement officers, and veterans care workers, to name just a few, are
routinely forced to implement tools that are barely functional, told to simply “make
it work”. This is by no means meant to
minimize the headaches associated with healthcare.gov – on the contrary, it
points to the need for real, systemic change.

There are two fundamental flaws at work in the legacy
government IT acquisitions model. The first is that the same procedures used to
acquire tanks and aircraft carriers are used to build software. Yet software
development is by nature a creative, generative, iterative process, not a
static set of requirements that won’t change significantly over the lifecycle
of the product. And while good software
is never truly finished, the essential building blocks can often be delivered
right away - the key is that you’re creating a basis for iteration and creative
enhancement, not obediently following the same blueprint for years at a time.

The second, and subtler, flaw is the failure to recognize
that America in general, and Silicon Valley in particular, are unique in the ability to build
software. Many remarkable advantages
of American life have contributed, in turn, to our dominance in software
development. Pondering an increasingly data-driven future, our abundance of
software talent has to be considered one of America’s most strategic resources,
and leveraged and fortified accordingly. Sadly, in the current IT acquisition
landscape, armies of contactors are paid by the hour to produce a crude
facsimile of what our best software artists could create for a tiny fraction of
the cost - but ignoring such a precious asset would be a mistake at any price.

One great irony of the healthcare.gov fiasco is that a major
rationale for the Affordable Care Act was the idea that Americans can do better
than the legacy healthcare system – only to see what should have been a
slam-dunk website rollout crippled from the beginning by the IT acquisitions
machine, another legacy system. Regardless of one’s views about the law itself,
though, one saving grace is made clear: if we want to do better, doing what
we’re already the very best at seems like a good place to start.

One of the most fundamental human desires
to believe that something is either A or B, and many complex endeavors are
compromised from the beginning by treating the A/B split as a first principle.
Binary logic may explain well-understood processes, but eventually the old
rules cease to apply, as with the failure of classical physics to explain
phenomena at atomic and subatomic scales. To understand quantum theory,
you have to accept the wave-particle duality, and even then, it turns out that
no one really knows why light exhibits both wave and particle
properties. We can observe, even predict, but not quite explain.

Startups are subject to similarly misunderstood
dualities. Simple minds want to know if winning depends more on doing A
or B: Should we move fast, or ship
quality? Build footprint or monetize? Optimize
on breadth or depth? The winner,
however, realizes that you have to figure out a way to do both. How this
is accomplished is highly contextualized in practice, but it begins with the
realization that you cannot have one without the other and hope to succeed. If it were as simple as doing only one thing
well, the success rate of venture capital would be much greater than 10%. And
when you do succeed, as in quantum mechanics, recognizing that things work a
certain way is more important than knowing why (for the purposes at hand, at
least).

A venture also displays both
continuous and discrete elements. From a wide angle, the growth curve or
product lifecycle may resemble a wave function, but it’s also extremely
iterative, and is most efficient when individual iterations occur at consistent
intervals. Likewise, one characteristic is often expressed through the
other, much as particle emissions are dependent on wave functions. The focus
and abstraction needed to go broader also allows you to go deeper effectively. Similarly, in the course of developing a
vertical solution, you often end up sharpening
your intuition about how slice the problem horizontally.

When striving to achieve both A
and B, you often need to consciously set up opposing forces to achieve your
goals. For example, you need hackers who are relentlessly focused on
solving the customer’s problems, even if they’re comparatively poor at productization
and long-term code stability, and you need artists who are relentlessly focused
on productization and pristine architecture even if their sense of customer
urgency leaves a lot to be desired. How you make them work together
productively is an art - there is always some violence, but it starts by
recognizing you need both, and accepting that their interactions only need to
be productive, not harmonious. The results of this type of particle collision
are very difficult to know ex ante,
so the safest bet is to find the best exemplars you can of each type – people
you would want to work with individually.

The need to harness opposing
forces sometimes extends beyond types of goal orientation to personality types
(though these often go hand in hand). Again, it’s up for debate why this
is the case, but the anecdotal evidence is extensive. The classic example
from quantum physics is Richard Feynman and Murray Gell-Mann’s collaboration on
the theory of beta decay. Feynman was famously mischievous and
irrepressible, while Gell-Mann was almost painfully serious and
methodical. While they frequently found each other exasperating, their
tension was tempered by strong mutual respect – an obvious but sometimes
overlooked component in organizational design.

Conventional high-tech wisdom
posits that among the qualities of “better”, “faster”, and “cheaper” you can
only pick two. With the right team, you can do extraordinary and counterintuitive
things. You can be better, faster, and cheaper – you just can’t be better,
faster, cheaper, and also comfortable, which is the true contradiction. At the
risk of resorting to truisms, doing hard things is hard - comfort is simply not
part of the equation. As Feynman himself once quipped, “You don’t like it, go
somewhere else!”

Ray Dalio’s Principles is required reading at Bridgewater,
and contains plenty of wisdom that resonates well beyond its original context. Far
down on the list, at #139, we find:

... 139) “Taste the soup.” A good restaurateur constantly
tastes the food that is coming out of his kitchen and judges it against his
vision of what is excellent. A good manager needs to do the same.

Soup tasting is hard and requires you to pierce comfortable levels
of abstraction. Often where there are
bad outcomes, there is a gross lack of soup tasting, both because of inertial
unwillingness to take a bite and because of ineffective gustation.

Amazon’s Jeff Bezos is the archetypal soup taster (among many
other outstanding talents). Bezos is
renowned for the depth of his knowledge and the clarity of his insights
(especially when making snap judgments), but equally important is his ability to
get to the crux of seemingly complex matters in five questions or less. It’s easy to forget how many complex
decisions Amazons has faced over the years, and the fact that their success is
often taken for granted is largely a tribute to Bezos’ ability to ask the right
questions so incisively and consistently.

The importance of soup tasting seems intuitive enough, but how you
develop the ability to taste soup well is one of the more underrated challenges
of leadership for a number of reasons.
To begin with, there is never just one kind of soup. The metaphor applies equally well to the
commercial success of your business and the view from inside. At the same time, not all soup is equally
important, and even the most astute taster’s capacity is limited, so you need a
focal point. As Bezos has often described, “We start with the customer and we
work backwards.”

More fundamentally, soup tasting is largely about overcoming bias,
which is generally a very difficult process.
It needs to be about fearless inquiry, not seeking reassurances. Anyone
who has done any actual cooking has probably had the experience of asking
someone else if a dish tastes funny, while silently convincing himself that the
answer is no. Of course, if it does taste funny, being polite does the aspiring
chef no favors. For soup tasting to have
any value as an exercise, you can’t be afraid of what you might discover.

Soup tasting is as much art as science, and as such it is hard to turn
it into a predictable framework. Still,
some basic principles apply:

It
all starts with probing.
Any time you are presented with an assertion, whether it’s a project
plan, forecast, or report, review it tenaciously. If something isn't clear to you, probe down. If
something strikes you as particularly important, probe down deeper. If there
are implicit assumptions, challenge them. Think of the annoying little kid who responds
to everything by simply asking “why?” It seems repetitive, but if you proceed
from the right starting questions you will quickly get to the heart of the
matter.

Get
closer to the problem. Something about the soup seems off. Now you need to taste it some more. The first step in getting close to the
problem is simply a more thorough probing.
If that doesn’t do the trick, you need to go down two or three levels,
either by honing in on the most important things in your area of credibility, or
by asking someone who is credible. By
the way, assessing who has credibility in what areas, beyond just being aware
of their reputations, is its own important form of soup tasting.

Measure.
Soup-making, both literal and figurative, requires experimentation, and
it’s one of the hallmarks of the Amazon approach. Bezos places a premium on experiments that
are measurable and produce hard data. As
he explained in Fast
Company, “The
great thing about fact-based decisions is that they overrule the hierarchy. The
most junior person in the company can win an argument with the most senior
person with a fact-based decision.” At
the same time, as Bezos will quickly tell you, “there’s this whole other set of
decisions that you can’t ultimately boil down to a math problem” – hence you
need to master the art as well as the science.

It’s also well worth considering what soup
tasting is not:

It’s not micromanagement. This
means telling people how to do something without tasting the soup for yourself,
or telling them how to do something in an area where you lack credibility.

It’s not distrust. Distrust is
not a productive default position, but neither is blind trust. Real trust is
developed by consistent soup tasting – as the old saying goes, “trust, but
verify”. Knowing which issues to escalate as priorities, and how to
escalate them as a team, is also an art form, honed through soup tasting
interactions.

It’s not indefinite, nor is it an end
in itself. You need to find the middle
ground between an excessively laissez-faire approach and never-ending
inspection.

The more soup you start to taste, the
more you'll want to taste, but as with anything, you can overdo it – just as
you can proofread too long, and you’re bound to miss something obvious. It
is critical to cultivate credible soup tasters throughout the organization, but
the transition from soup taster to meta-soup taster is a tough one. It only
works if your trust has been validated, and requires a great deal of
intellectual honesty to avoid indulging in wishful thinking, feel-good exercises,
or just shedding responsibility.

In the end, soup tasting is how you
know what is true – “overcoming bias” and “intellectual honesty” are really
just fancier ways of expressing this. And the truth matters more than
anything else. In his introduction to Principles, Dalio states,

“I also believe
that those principles that are most valuable to each of us come from our own
encounters with reality and our reflections on these encounters – not from
being taught and simply accepting someone else’s principles…. So, when digesting each principle,
please…

…ask yourself: “Is it true?”

All soup tasting, ultimately, is a
variation on this one simple yet profound question.

I think a lot about what specific competencies are needed
when starting something, but even more fundamentally, how does someone approach
work (and life)? My experience is that there are goal-oriented people and there
are process-oriented people. Finding
goal-oriented people is one of the most crucial determinants of startup success
- no amount of expertise can substitute for goal orientation.

There is implicit bias in both orientations, but not all
biases are created equal. Goal
orientation subordinates process to outcomes.
As a result, there is sometimes a tendency to ignore or undervalue the
importance of frameworks, checklists, and details, though in my experience
truly goal-oriented people are quite intuitive at abstracting useful and
repeatable approaches from their experiences. Planning and process are also not
the same thing – done right, planning is simply the division of larger goals
into smaller ones. Even so, goal
orientation is a vastly preferable bias.
You can learn organization (and the most effective people are constantly
re-learning it), but motivation is much harder.
By the same token, consultants can help to improve your processes, but
they can’t define your goals for you.

Process orientation, on the other hand, actually subverts your
goals, under the subtle guise of helping you achieve them. Uncritical acceptance of process creates an
alibi for failure. When things go wrong,
a process-oriented person thinks “I did all I could while following the process
to the letter, so maybe it just wasn’t meant to be.” Without a healthy
institutional skepticism, process easily becomes a goal in itself. To be fair,
processes and goals can both be destructive if they are not subject to revision,
but process is fundamentally tied to predictability and routine, whereas goals
require constant thought and re-examination to remain effective.

The most inventive organizations are more concerned with
limiting process than perfecting it. Apple’s revitalization began when they
started to re-imagine a hardware problem (personal devices) as a software
problem. If process had been the dominant consideration, Apple would have kept
refining their old product lines until they faded into irrelevance. By the same token, many enormous failures
affecting society writ large can be attributed in part to relying on process
while ignoring the substance (Enron, the subprime collapse, countless failed
technology acquisitions).

Everyone claims to be goal-oriented (it’s probably one of
the top resume clichés), but the norm is that people want to be told what to
do. Freedom is scary, partly because it
is new and unfamiliar, but mostly because the onus will be on you to succeed once
the security blanket of process is taken away.
Truly meritocratic and goal-oriented organizations are also quite rare,
so it’s easy to mistake boredom and frustration with bureaucracy for real
self-determination. During both Internet
bubbles, countless career big-company employees decided they wanted to “join a
startup”, without really asking why or realizing that they were trying to be
different in the exact same way as everyone else (the word “join” isn’t an
accident either). Ironically, when
asked by hiring managers what they
would bring to the table, these people would typically deliver lengthy homages
to their current company’s processes.

One of the most interesting things about goal and process
orientation is what part is constitutional and cultural. Some people are natural insurgents, who will
orient and achieve the goal so intuitively that they may not even appear
disruptive to the casual observer.
Others have been raised in cultures that value conformity and
process. Just as many genes are only
expressed when the right stressors are present, a naturally goal-oriented
person may not emerge until landing in the right environment. The converse is
much less common, however – process-oriented people tend to be exposed fairly
quickly in truly goal-oriented environments where there is little concept of
playing along.

The conflict between goal and process orientation is
exceptionally relevant to planning one’s career. We’ve all seen picture-perfect, cookie-cutter
resumes that are obviously a result of process orientation,. What’s more interesting is when people try to
design rules and processes to reverse-engineer a major career shift. There are plenty of “experts” who will tell
you to get experience in the private sector before doing a stint in government
(or vice versa), or that you should learn “fundamentals” at a Fortune 500 company before joining an
early-stage startup. With all due
respect, these people completely miss the point of having goals. It should be more obvious with really
unorthodox career arcs, but even so, many people are apt to read about Steve
Jobs and think “Ok, so I should drop out of college, but take a calligraphy
class, and get fired from my own company before making a triumphant comeback.”

Of course, there are plenty of perfectly good environments
for process-oriented people. The problem
is when they land in the wrong place and both the person and team suffer. It really comes down to honestly understanding your strengths and
weaknesses, as an individual and as an organization.

Ownership is the essence of the American Dream – or is it? The
mortgage crisis certainly led many people to rethink the virtues of owning a
home, but even in less dramatic markets, it’s a fair question. There are many assumptions to be challenged
and hidden costs to be considered.
Warren Buffett continues
to bet heavily on housing, while Yale economist Robert Shiller contends that
housing is an investment fad, with no net appreciation in the US market
over 100 years. Of course, as author of
the Shiller post points out, most of us are living in our homes, and the benefit
is partly intangible. But how much does
the intangible actually depend on ownership as opposed to just being there?

Rental has always been a popular alternative for major,
long-term-use assets with high maintenance costs. Traditionally
this has meant homes and cars, but they are just the beginning. The convergence of low-friction technology,
on-demand efficiencies, expanding tastes, and shrinking wallets has led to the
explosion of the sharing economy, as
reported by The Economist. There are
countless examples, each with its own intricacies: Rent The Runway, Amazon Web
Services/EC2, ZipCar, Uber, even BlackJet. It’s about deciding not to own something
you really don’t need to own yourself (and achieving better financial health as
a result).). Increasingly, we have the
option to spread out the long-term maintenance cost, which actually exceeds the
acquisition cost for more assets than people tend to realize, while maintaining
high availability.

The sharing economy ranges from necessities such as housing
and transportation to luxuries such as designer
dresses and private jets but necessities quickly become luxuries when
acquired carelessly. This is especially
pertinent for government, but it’s not always obvious which costs justify
themselves. Traditionally, the Forest
Service, Coast Guard, police, et cetera all maintained their own helicopters,
for example. Even if they were grounded
90% of the time, no one wanted to give up ownership if they had a choice. Now that states are going broke, sharing is a
much more palatable option, but it’s not just about cutting costs – you have to
re-examine the incentives. In government, one of the major drivers of ownership is funding.
It’s easier to get large capital funds for new assets because they are
assumed to be investments— and investment has a return. It’s much harder
to get operational funding because that is a cost - and costs are bad, right?
(how many times have you heard the renting is throwing money away?) But
what if that helicopter fleet is just a really bad investment? It becomes a lot
easier to make that case if you can get a
helicopter on short notice, probably based on a retainer and/or hourly use fee
(similar to ZipCar).

Separating the emotional appeal of ownership (as difficult
as that may be), my thesis is that it is generally a bad idea to own an asset
unless you have a specific and special competency to own it. This is the same for everything: housing,
cars, servers - and especially software.

Cars are a tricky
case, famously depreciating (up to 10%) the minute you drive them off the lot (a
phrase so commonplace you probably finished it in your head). Many of us don’t
know how to truly maintain our cars beyond the basics. For occasional drivers, there is the lesser
option, such as ZipCar, but US infrastructure is still designed around
individual drivers, and giving up your car can be very difficult if you don’t
live in a city. However, something like Sebastian
Thrun's self-driving car work could someday open
up a whole new world of on-demand transportation that is more efficient and
safer than anything we have now. Think
about it: 97% of the time, your car is sitting around, taking up space, idle.

Servers, beyond
the fixed costs, require hardware maintenance, networking, power and
cooling. Many servers require
replacement after just a few years. It’s
much easier and lower overhead to simply rent the capacity you need - unless
you are Google, Amazon, or the like, and have a special competency that
requires you to maintain your own servers.

Software is often
perfectly suited to on-demand delivery for predictable use cases, and
software-as-a-service (SaaS) certainly qualifies as one of the major technology
waves of recent years. More and more,
the prevailing sentiment is “why buy software when you can rent it?”, as
reflected in Salesforce’s now-iconic
logo.

Of course, not all software needs can be satisfied by
SaaS. Then the relevant question is
whether to build or buy, as opposed to rent or own, but the underlying
considerations are similar (if quite a bit more complex). My guiding principle is that you shouldn’t be
building your own software unless you have a particular competency that
requires it, or need to develop such a competency.

In keeping with the theme of recognizing our own biases,
it’s important to separate the emotional resonance of ownership from the
practical reality. With software, the
reality is that code depreciates incredibly fast, not to mention the continuous
iteration and improvement required for software to stay relevant. Ownership
bias is perhaps most frequent (and outsized) in government, where the idea of “owning”
the code base has become hugely and irrationally popular. In the vast majority of cases, “building” and
subsequently owning your own software actually means contracting with private
vendors to develop complex, bespoke systems that cost 10, even 100 times as
much as an off-the-shelf product.

There is an attractive yet perniciously false idea that once
you build the software, it’s yours, free and clear. The appeal is simple - people enjoy the
feeling of ownership, and are naturally wary of being beholden to outside
vendors. But the reality is that you are
paying down accrued technical debt all the time – just as you would maintain a
house or car, except that a house or car isn’t expected to fundamentally change
in a matter of months. Furthermore, a
bespoke project concentrates that debt with one client instead of amortizing it
across all customers the way a productized solution does. In a very cynical way, bespoke developers are
smart to let the government own the source code. Not only does this prevent
other customers from re-using the IP (and saving money on development), but it
also makes the ongoing maintenance costs easier to justify because now, it’s
their baby.

The final point is that if you are going to buy, you need to
make sure that the seller has a specific competency in software. It might seem obvious, but more than any
other product, you want to buy software from a software company. Rolls-Royce
can build world-class cars and jet engines alike, but there isn’t really an
analog in the world of aerospace companies and systems integrators that also attempt
to build software. The product
lifecycle, pace of innovation, maintenance considerations, and above all the
deltas between good and great all make software unique among industries.